SECOND AMENDED AND RESTATED
ADMINISTRATIVE SERVICES AGREEMENT
SECOND AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT ("Agreement")
originally entered into as of February 3, 1999; amended as of August 12, 1999;
further amended and restated as of November 11, 1999; and further amended and
restated as of this 9th day of May, 2000 between E*TRADE Funds (a Delaware
business trust, hereinafter referred to as the "Company"), on behalf of the
series listed on Exhibit A hereto, as amended from time to time (each a "Fund"
and collectively, the "Funds"), and E*TRADE Asset Management, Inc. (a Delaware
corporation, hereinafter referred to as the "Administrator").
WHEREAS, the Company is a registered investment company under the
Investment Company Act of 1940, as amended (the "Act");
WHEREAS, the Administrator is able to act as administrator of the Fund;
WHEREAS, the Company wishes to retain the Administrator to render
administrative services with respect to each of the Funds listed on Exhibit A
hereto (as the same may be amended by the mutual written consent of the parties
from time to time), and the Administrator has agreed to act as administrator for
each of the Funds.
NOW, THEREFORE, for good and valuable consideration, the receipt whereof is
hereby acknowledged, and the mutual performance of undertakings herein, it is
agreed by and between the parties hereto as follows:
1. Services to be Provided by the Administrator. The Administrator, as
administrator for the Funds, will, at its own expense:
(a) Furnish to the Funds the services of its employees and agents in
the management and conduct of the corporate business and affairs of the Funds;
(b) If requested, provide the services of its officers as
administrative executives of the Funds and the services of any trustees of the
Funds who are "interested persons" of the Administrator or its affiliates, as
that term is defined in the Act, subject in each case to their individual
consent to serve and to applicable legal limitations;
(c) Provide office space and facilities required for conducting the
business of the Funds, and monitor and review the Funds' contracted services and
expenditures;
(d) Prepare or supervise the preparation of periodic reports to the
Funds' shareholders and prepare and file, with such advice of counsel as
reasonably deemed necessary by the Administrator, such documents and other
papers as may be required to comply with the rules, regulations and requirements
of the Securities and Exchange Commission ("SEC") and other governmental
agencies, whether state or federal;
(e) Supervise regulatory compliance matters, including the compilation
of information for reports to, and filing with the SEC and other governmental
agencies, whether state or federal;
(f) Coordinate the services provided to the Funds by investment
advisors, transfer and dividend disbursing agents, custodians,
sub-administrators, shareholder servicing agent, independent auditors and legal
counsel; and
(g) Report to the Trustees of the Company concerning its activities
pursuant to this Agreement at regular meetings of the Trustees and at such other
times as the Trustees may request.
2. Expenses.
(a) Expenses of the Administrator. The Administrator shall bear
expenses incurred by it which are necessary for the performance of its duties
and activities specified in this Agreement and shall bear all of the expenses
incurred by the Company and/or the Funds in their operation, except such
expenses as are specifically assumed by the Company and/or the Funds under this
Agreement.
(b) Expenses of Each Fund. The Company and each Fund shall bear the
expense of the fees of its investment advisors (including fees paid to any
subadvisor), the Administrator's compensation under this Agreement, and any
expenses of any "master" fund in which a Fund invests.
(c) Other Fund Expenses. The Administrator shall pay all expenses of
the Company and each Fund not specifically assumed by the Company and/or each
Fund in Section 2(b) or Section 3 of this Agreement.
(d) Nothing in this Agreement shall prejudice the ability of the
Funds' Trustees to establish their own compensation or in any way prejudice the
rights and powers of the Funds' Board of Trustees generally.
3. Compensation. For the services provided and the expenses assumed by the
Administrator, each of the Funds shall pay to the Administrator a fee, computed
daily and to be paid on the last business day of each month equal on an annual
basis to the amount of the average daily net assets of such Fund as listed
opposite that Fund's name in Exhibit A, attached hereto.
The term "average daily net assets of the Fund" is defined as the average
of the values placed on the net assets of the Fund as of the close of the New
York Stock Exchange, on each day on which the net asset value of the portfolio
of the Fund is determined consistent with the provisions of Rule 22c-1 under the
1940 Act or, if the Fund lawfully determines the value of the net assets of its
portfolio as of some other time on each business day, as of such time. The value
of the net assets of the Fund shall be determined pursuant to the applicable
provisions of the Fund's then current registration statement under the 1940 Act
and the Securities Act of 1933 ("Registration Statement"). If, pursuant to such
provisions, the determination of net asset value is suspended for any particular
business day, then for the purposes of this Section 3, the value of the net
assets of the Fund shall be deemed to be the value of such net assets as last
determined in accordance with the Registration Statement. If the determination
of the net asset value of the Fund has been suspended pursuant to the
Registration Statement for a period including a month for which payment pursuant
to this Agreement is due, the Administrator's compensation payable at the end of
such month shall be computed on the basis of the value of the net assets of the
Fund as last determined (whether during or prior to such month).
4. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Administrator hereby agrees that all records which it
maintains or causes to be maintained for the Funds are the property of the Funds
and further agrees to surrender promptly to the Funds any of such records upon
the Company's request. The Administrator further agrees to preserve or cause to
be preserved for the periods prescribed by Rule 31a-2 under the 1940 Act the
records required to be maintained by Rule 31a-1 under the 1940 Act.
5. Sub-Contracts. The Administrator may, from time to time, at its own
expense, employ or associate with itself such person or persons as it believes
necessary to assist it in carrying out its obligations under this Agreement.
6. Compliance. The Administrator shall observe and comply with the
Certificate of Trust and organizing documents of the Company, the applicable
provisions of the Registration Statement, federal securities laws, all lawful
resolutions of the Company's Trustees and other lawful orders and directions
given to it from time to time by the Trustees. All activities engaged in by the
Administrator hereunder shall be at all times subject to the control of and
review by the Trustees.
7. Limitations of Liability.
(a) Except as may otherwise be required by the 1940 Act or the rules
thereunder or other applicable law, neither the Administrator nor its
shareholders, officers, directors, employees or agents shall be subject to any
liability for, or any damages, expenses or losses incurred in connection with,
any act or omission connected with or arising out of any services rendered under
this Agreement, except by reason of willful misfeasance, bad faith or negligence
in the performance of the Administrator's duties or by reason of reckless
disregard of the Administrator's obligations and duties under this Agreement.
Notwithstanding the foregoing, the Administrator shall not be liable to the
Company or the Funds for the acts and omissions of any party engaged by the
Administrator to assist it in carrying out its obligations under this Agreement
except to the extent that such party is liable to the Administrator for such
acts and omissions pursuant to the contract under which the Administrator shall
have retained such party. Any person, even though also employed by the
Administrator, who may be or become an employee of and paid by the Company shall
be deemed, when acting within the scope of his employment by the Company, to be
acting in such employment solely for the Company and not as the employee or
agent of the Administrator.
(b) The Administrator shall look only to the assets of a particular
Fund for the performance of the Agreement by the Company with respect to such
Fund, and neither the Trustees nor any of the Company's shareholders, officers,
employees or agents, whether past, present or future, shall be personally liable
therefor.
8. Non-Exclusivity. Nothing in this Agreement will in any way limit or
restrict the Administrator or any of its officers, directors, employees, agents
or affiliates from providing administrative services or other services to any
other person or entity pursuant to any contract or otherwise; and no such
performance of administrative or other services or taking of any such action or
doing of any such thing, shall be in any manner restricted or otherwise affected
by any aspect of any relationship of the Administrator to the Company or the
Funds or be deemed to violate or give rise to any duty or obligation of the
Administrator to the Company, except as otherwise imposed by law.
9. Duration and Termination. This Agreement shall continue in effect with
respect to each Fund as indicated on Exhibit B hereto, if not sooner terminated.
This Agreement shall continue in effect with respect to each Fund for successive
12-month periods, unless terminated, provided that each such continuance is
specifically approved at least annually by (a) the vote of a majority of the
entire Board of Trustees of the Funds, or by the vote of a majority of the
outstanding voting securities of the Funds (as defined in the 1940 Act), and (b)
the vote of a majority of those Trustees who are not parties to this Agreement
or interested persons (as such term is defined in the ▇▇▇▇ ▇▇▇) at a meeting
called for the purpose of voting on such approval. This Agreement may be
terminated at any time without payment of any penalty, by the Company upon the
vote of a majority of the Company's Board of Trustees or by a majority of the
outstanding voting securities of the Fund, or by the Administrator, in each
case, on sixty (60) days' written notice to the other party. This Agreement
shall automatically terminate in the event of its assignment (as such term is
defined in the 1940 Act).
10. Reliance on Information. In discharging the functions specified in this
Agreement, the Administrator may, without inquiry, rely and act upon all
notices, information or other communications reasonably believed to have been
supplied to it by any one or more of the Trustees or agents of the Company.
11. Amendments. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought.
12. Miscellaneous.
a. This Agreement shall be construed in accordance with the laws of
the State of Delaware, provided that nothing herein shall be construed in a
manner inconsistent with the 1940 Act, as amended, or rules or orders of the SEC
thereunder.
b. The captions of this Agreement are included for convenience only
and in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect.
c. If any provisions of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
d. The Administrator shall for all purposes herein be deemed to be an
independent contractor and shall have, unless otherwise expressly provided or
authorized, no authority to act for or represent the Company or the Funds in any
way or otherwise be deemed an agent of the Company or the Funds.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
E*TRADE FUNDS (on behalf of the series
listed on Exhibit A)
By:___________________________________________
Name:
Title:
E*TRADE ASSET MANAGEMENT, INC.
By:___________________________________________
Name:
Title:
EXHIBIT A
to the
SECOND AMENDED AND RESTATED
ADMINISTRATIVE SERVICES AGREEMENT
Exhibit A dated as of May 9, 2000, to Amended and Restated
Administrative Services Agreement dated as of May 9, 2000, between E*TRADE Funds
and E*TRADE Asset Management, Inc.
Name of Fund Fee
E*TRADE S&P 500 Index Fund 0.25%
E*TRADE Extended Market Index Fund 0.26%
E*TRADE Bond Index Fund 0.25%
E*TRADE Technology Index Fund 0.60%
E*TRADE International Index Fund 0.28%
E*TRADE E-Commerce Index Fund 0.70%
E*TRADE Global Titans Index Fund 0.35%
E*TRADE Premier Money Market Fund 0.30%
E*TRADE FUNDS E*TRADE ASSET MANAGEMENT, INC.
By:________________________________ By:_____________________________
Name: Name:
Title: Title:
EXHIBIT B
to the
SECOND AMENDED AND RESTATED
ADMINISTRATIVE SERVICES AGREEMENT
Exhibit B dated as of May 9, 2000, to Amended and Restated Administrative
Services Agreement dated as of May 9, 2000, between E*TRADE Funds and E*TRADE
Asset Management, Inc.
FUND End of Initial Term
---- -------------------
E*TRADE S&P 500 Index Fund February 3, 2001
E*TRADE Extended Market Index Fund August 12, 2001
E*TRADE Bond Index Fund August 12, 2001
E*TRADE Technology Index Fund August 12, 2001
E*TRADE International Index Fund October 19, 2001
E*TRADE E-Commerce Index Fund October 19, 2001
E*TRADE Global Titans Fund February 18, 2002
E*TRADE Premier Money Market Fund March 29, 2002
E*TRADE FUNDS E*TRADE ASSET MANAGEMENT, INC.
By:
----------------------------- By:___________________________
Name: Name
Title: Title: